tv Bloomberg Bottom Line Bloomberg March 24, 2014 2:00pm-3:01pm EDT
>> this is bottom line, the intersection of business with the mainstream perspective. malaysia says flight 370 crashed in the southern indian ocean. president obama meets with g-7 leaders on the ukraine crisis. ukraine on the ukraine crisis. landing a major league team for spring training. our top story, investigators have now concluded that crashedn air flight 370
in the indian ocean. 370 ended inflight the southern indian ocean. >> officials are rolling out theories of a detour over asia, even as a search for wreckage from the jetliner drags on. an analysis of satellite data shows the boeing 787 flew along the southern corridor and the last position was in the middle of the indian ocean west of turk. the prime minister statement cap today in which hopes rose for
conclusion to a mystery now in the 17th day of sightings of objects with aircraft that see. he shed no new light on why the plane diverted from kuala lumpur to beijing route and traveled in the opposite direction. for more on the mistry, we turn to an attorney with aviation law group. commercial pilots, flight instructor and certified aircraft mechanic joins us on the phone from seattle. thank you for joining us. let me first ask you what you think about the latest development. seems the malaysians are putting to what mostpt end think should be an ongoing investigation. >> thank you. i think it is as expected. we were all hoping there would
be conclusive evidence as to what happens in flight 370 and appears they have found it. willnk the families appreciate some finality as to what happened to the flight. they do not really have much. we have heard aircrafts have spotted parts of the wreckage, but a lot of people do not feel like there is conclusive proof and certainly have no idea what happened to the flight. >> that is correct. the strength of their statements, i am assuming they may have more information than they are currently disclosing to the public. >> let me ask about passenger to the regards of the families that will be rewarded, at least some money automatically but may also want to sue elation airlines. how does this process start now?
>> let me just say my heart goes out to the passengers and families of flight 370, and though we may talk about legal claims, we must also respect the grieving families and let them talk about the most significant loss. , whatg with legal claims they are based on, what they've -- what we look at as attorneys representing families is the evidence. is not very much evidence to point the finger. with regard to the airline, there is an international treaty the montréal convention which allows them to make claims against the air carrier and only applies to the air carriers involved. those claims have gone forward because they fall within the convention. under the convention they do not need to prove fault, just that an accident occurred on the
flight, which i think we can all see at this point. therefore, they will be entitled to compensation. -- i have seen figures that are relatively low, and though i am sure all of the families would prefer to have their loved ones back as opposed there is no amount of money to make up for the loss of .omeone you love 175he law allows for thousand dollars u.s. limit is just the limit as if the airline can meet to burdens. the limit is cast unless the airline can turn around and proved it was not at fault at
all for the accident or that a third party was solely at fault for the accident. how all of the facts come out, i think it will be virtually impossible for malaysia airlines to establish it had no fault whatsoever for the accident, and therefore, the door will be open for full compensatory damages without limit against malaysia airlines. >> how could the airline prove it is not at fault? if the pilot made an error, either intentionally or by accident, wouldn't that mean malaysia airlines is at fault? >> if an air carrier is any percentage of fault, then it cannot limit liability to the $175,000. under the retention it retains the right to go after third parties for reimbursement of
sums paid to passengers but what is most important is the passenger family will be entitled to full compensation under the convention in the law of the country where the claim arises. that is very important because most of the claims against malaysia airlines will not have jurisdictions in the united states. >> what kind of awards have we seen in similar cases? obviously each one is incredibly unique and do not want to speculate for what happened here but for example the french crash or what kind of awards to be seen cases like that? >> again, a lot of the deals with the specific case. what is most important the united states is known as having
the most reasonable, most result incompensatory cases like this. in that case i believe the united states and their average some of the average recovery per family is approximately 2,000,000-3,000,000 dollar range area that is standing in average from young kids to old people to high income earners and somewhere in between. >> we appreciate your time. obviously a very somber subject but one we are following incredibly closely. coming up, the latest on president obama's meeting with his fellow g-seven liters. notice cap it is not eight. -- his fellow g-7 leaders.
today therefore a summit on a nuclear security. the real issue is the crisis in ukraine. international correspondent hans nichols is in the dutch city. what do we expect to hear? what is going on there? >> right now the group of seven the primee meeting in minister's office. his official residence right around the corner. so far here's what happened. leaders have decided to stop letting russia host parties or as they call them here in europe, summits. will beke the g-eight canceled. the prime minister has said it will no longer be held and russia. obama talking about just having g-seven and formally. is one thing you should do aside from economic he needs to breathe
and -- bring together the european tears in the room with right now. a little bit of detail in the ond -- meeting, flanked by july merkel, david cameron and looks more like the old nato alliance potentially than the g-seven. is there any talk, and a number of people have told us know but i think they're trying to de-escalate the situation responsibly, is there talk of returning to an almost cold war scenario where you have g-safeco and -- g-seven against russia and nuclear arms? >> clearly they are both armed with nuclear weapons. of theas been talk nuclear issue. japan has agreed to legal -- relinquish the highly enriched uranium.
white house officials briefing earlier talked about the g-seven will talk with russia when it has something to say to russia or russia has a response. right now in the cold war there were conversations going on. only engaging with and theytially more openly, if actually decide to alter their and pullin crimea troops out and have international monetary command. >> hans nichols, european correspondent there. now looking at how russians are feeling the impact of the sanctions. ryan chilcote joins me from moscow.
you are in moscow. i was almost a little worried when i heard that, but it is not the cold war. you see americans going in and out of russia and vice versa. >> you do. the big issue is not so much the sanctions in terms of economic fallout but the threat of sanctions and that is something we are learning this evening. they have been pulling the economy out. the economy ministry has said more money has left this country -- moorman is left the country this year than last year and last year was not a good year of either. 65 billion in the first two .5 months of the year. the head of the bank and said going into this, -- russia'snomy economy was artie blowing so if we see more money leaving the country, russia could be looking at a recession and would keep
people like me away. >> i think it is not only the economic, but demonstrations. i think we can get the recession. >> on street level, there are not that many signs of the fallout so far. ruvell around a record low. weaker than is 10% it should be. the real people who feel it our if you are unlucky enough to have the $160,000 credit cards issued. the one and only one sanctioned by the united states. those credit cards are basically worthless because they refuse to service them. leon that, all pretty abstract
at this point. covering theote story on the ground in moscow. the u.s. senate may put the wheels in motion to get ukraine $1 billion in loan guarantees. a political battle may stand in its way. >> the loan guarantee is not particularly controversial but both generally support this. the house passed a loan guarantee measure earlier this month. just thisck durbin weekend was talking about why it was important and important to do it quickly. they do need everything from fuels to tires to sleeping bags to meals. this army in ukraine was that the stated by your vukovich.
them ando strengthen help them -- helped him with advice and backing. it may come to small arms and the keep that on the table. >> direct assistance and sanctions. here is the sticking point. the senate version includes a provision not in the house version. ship $63 billion from a credit line the u.s. gave the imf in crisis funds back in 2009 back in 2000 nine into permanent resources. it is pushing to make good on a commitment than 2010. tried to attach this to other bills in the past. a lot of conservatives do not want to see more government support in spending but argue this is not tied specifically to ukraine but the ukrainian crisis is being used as a bargaining chip. the white house argues the imf
they will be stabilizing the economy and this measure will help them do that and that is what this controversy is about. >> megan hughes in washington, thank you for that. you may not be able to tell by the weather, but it is officially spring, and that means baseball, u.s. opening day not far off. we all drew straws and mike mckee was the big winner and is in fort myers, florida, for opening day. >> unfortunately today's game called off because of rain. we did not find one town -- we did find a team that lost its steam and not -- and upset about it. ♪
>> cities in arizona and florida are battling it out to see which can offer the most in taxpayer subsidies to land a major league team for spring training. michael mckee found a town in florida but has dropped out of the fight. it knows it cannot win. he joins us live from fort myers, florida. >> we are home at the spring training home of the minnesota twins who carried the land o'lakes name a little too far. rain forced the cancellation of the game unfortunately. also a town that hosts the boston red sox. for years before coming here they trained in one of baseball's most storied small towns, winterhaven. you go to the ballpark now, and it is like visiting a ghost town. the park itself is falling apart. abandoned by the red sox and
then the cleveland indians moved in but unfortunately they did not stay either. it opened 48 years ago. when teams just came down here to get ready for the season, not to make a profit. it closed when the indians were offered $100 million. up the offer and consider the offer and consider the implications and said see you. any business, if someone is going to give you more, and you have to pay less, that is more attractive to you. as long as there are communities out there willing to front the expenses, and that is what will be most attractive to a ball club. the end of based all did not mean the end of winterhaven.
they bought -- brought in a railroad company for intermodal transfer facility, more jobs, and they figured out they can if not more by renting out the facilities that the major leaguers did not want. there are still some division whether we want it or don't but the city decided we can live without it. outeplace that we just went and recruited collegian and now we have the largest collegiate spring training on the planet. >> sales tax collections are higher. incomes are higher. winterhaven officials say if the team wanted to come back and wanted to pay for the new
facilities and upgrades, they would be willing to talk about right now they look at the money andother teams are spending say no thanks. talk a lot more about this because baseball piques my interest and you are such a lucky man to go down there. the hour.tes past ont means bloomberg news is the markets. >> disappointing economic report showing a slowdown in manufacturing. nasdaq being 5 -- dragged down by biotech stocks in particular. two stocks we're keeping our eye on, the first disney. the disney abc tv group when she leaves. we are also watching netflix .hough shares dropping this could threaten the domination of the streaming
>> welcome back to "bottom lin " ." let's check some of the top stories. says aan prime minister new analysis of satellite data indicate the mole is saying -- the missing malaysian airlines plane plunged into a remote corner of the indian ocean. decision innted this struggle about what 370.ned to flight 239 passengers and crew were
aboard. it is still it free serious mistreatment or hopes of finding any more survivors from a massive mudslides that killed at eight people in washington state are fading. -- theed more bod pulled more bodies. search and rescue teams to two the air here at and on the ground and foot looking for anyone who might still be alive. they're the homes were destroyed. authorities believe it was caused by ground made unstable by a recent heavy rainfall. in a car chicago commuter cream plowed across platform and a scaled an escalator. it happened on the blue line cap the oer into national airport. 32 people on board were injured. none of the injuries were life-threatening. that is a look at the top stories in the news at this hour. the commodities
report. su keenan joins us from the newsroom. what have you got? whack a little change right below $100. there is the weekend oil spill that close the shipping channel in houston. the waterway is a key transit for process fuel. picture showed the 4000 barrel spill is visible from high above the earth. postcard crews are trying to contain this as 93 vessels way to move through the channel. let closely at this next clip. when the shipent crashes into the barge in the middle of deep fog. it is a 25th year anniversary of the day the oil tank ran aground. closer of 4-5 days would be serious. crews do not have enough on hand. one energy consultants of this
is like an energy or tropical storm. the channels could be shut for up to a week. the gold bearers has something to cheer about. down dayseeing another for gold. it has metal moving in different directions. gold glover. -- gold is lower. palladium is higher. there's been no escalation for people to jump back into the safe haven assets. janet yellen is helping goldman sachs to get the barest forecast back on track after the hedge fund was appointed to the precious metal lawyers this year. we had the most bullish bets in 16 months. we are now seeing gold come back down to earth your detailed the most since november. >> by the way. correct me if i am wrong. gold bears would really cheer.
it is the bowls that are really enthusiastic and almost obsessive, right? >> it was looking bad for the bears recently. many have taken various positions on gold. general motors could be navigating rough roads ahead as aggression and officials investigated a failure linked to at least 12 deaths in the recall of over 1.5 million vehicles. intohas expanded bankruptcy fraud. it yang yang joins us now with more on the story. a real plot twist year. >> that is right. in addition to the handling of the ignition switch failure, they are also looking into whether the company committed
fraud by not disclosing the defects. it can lead to a cascade of liability claims. that is according to the new york times. we are you know that general motors first learned of the problem in 2001. whether gmn is knowingly fail to tell the government. this is important because of the bank and see restructuring. it protects them from liability. it has not stopped the lawsuits from rolling in. at this point they say no pertinent information was withheld from the court during the gm chapter. this is still in its early stages. >> what is happening with the congressional investigation? fax at is gearing up.
congress has a few hearings. the first of which comes on april 1 when mary will testify before the house energy and commerce committee. will be watching to see what she has to say. she only learned about an analysis of weeks before she became ceo and was informed of the decision to recall cars at the end of january. >> thank you very much. coming up, the minimum wage debate. the former direct or of the cbo says raising the minimum wage will end up hurting the very workers the bill is designed to protect. we will have more on that after the break. ♪
for federal workers starting 2015. the senate may consider it as early as this week. doug is the president of the american action forum and a former director of the congressional budget office. he thinks an effort to raise the minimum wage would be misguided. he joins us from washington. what thisirst about really is. if the government comes in and floors oricial price ceilings on any good or service, thatn 101 you is that. >> this has been a very bad recovery. people hear a lot about the jobs and the failure to get the unemployment rate down. we have not seen the kind of real wage gains people have been expecting and used to. income hasfamily
declined during recovery. in somebody offers up something that says you could get paid more, it is politically very popular. it is the foundation of a bad recovery. then you get a group of economists who say this will have no impact on employment. politicians feel like they have got something that is all approved. it does not hurt jobs. >> and almost infinite they could get the middleman and just write people a check to vote for them rather than go through all of this rigmarole. is that illegal? >> it is illegal. it will be much more efficient. a bad idea this is from a number of perspectives. the biggest is that it would hurt job creation, especially with the low workers. and do not think it is an accident that when we raised the memo wage in 2009 we now have teenage unemployment over two percent. we price them out of the -- 20%.
we priced them out of the labor market. are not targeting the real problem. we are trading some distress in pockets of the economy in the process. this does not really outraged me as someone with common sense because the numbers are so low to begin with. i do not think the government should be regulating what a man or a woman who runs a business should be able to pay their employees. i think any business iran would pay more than that to everyone who works there. is that what you do not see much of a fight against that? >> it really is targeted on a small section of the labor market. 500,000 jobs would go million jobs in america. it does not seem like a big number. it is a very big number if you are in retail, trade or any
eating and drinking establishment. it is about a years worth of hiring. pocketed distress with broader gains. that is a recipe to do something not very smart. >> where do the unions stand on this? that is a huge voting bloc of support. or wil>> you get a lot did. i was out of it. appeared --the former director of the congressional budget office. coming up, there are fresh accusations that actually matter of the cheat on your spouse
that a lot of these profiles are they? unfamiliar with these. thanis is nothing more sour grapes. wanted a fastyee payday. to an 100% committed organic community. anything other organic, true and real. 100% legitimate. >> every person who signs up says i signed up to ashley madison. i found the girl with whom i want to communicate and i started talking to her. there is no way that she works for or is anyway if italy aged with your company or a company that you are related to. >> exactly. that would never happen. zero chance. it is not a business practice we engage in. comesan happen is a user
here with malicious intent. if that person gets through, we will refund it in two seconds. way back. all the that happens very frequently. it does happen from time to time. sour grapes. our site it is not an online brothel. it is a real service with throw people. it takes time and communication. it is not work with everybody. sometimes people want to blame the service rather than their communication service. it is not what takes place. >> talk to me about the business model. ne browse it for free and pay a certain amount per contact or conversation?
how does that work. >> we are little different than other dating services. credit.munication costs we do not want you to do that digital lipstick by moving it over to a personal e-mail account. weak urge to keep it on the platform. -- we urge you to keep it on the platform. every initial communication has a cost that it is with genuine people. >> you do have some sort of security operation to make sure all of these people are real and not some sort of fishing scheme -- phishing scheme? i guess the most, i'm problem is prostitutes are working. >> there is a natural way. she can sit back and build a profile or upload a profile. she reads the communications. it is pretty rare for a woman to upload a photo out of the gate.
if that happens we have a high probability we have an imposter on their hands. we read b communications. if they are fake, they are suspended during people are trying to move over a campsite. if you do get caught, we return your credit to you. you can go and use them on the organic profiles. koreanow i am in south for a launch. it is looking for men and women to have extramarital encounters successfully. >> this just dawned on me. have you ever had any interactions with the nsa or concerns that edward snowden is going to say that the u.s. government is looking into ashley madison's database? >> maybe you're staying with some sarcasm but maybe there is validity. why some are
little angry with general petraeus. he can be compromised. so much of what we have done near the subject rate the perfect affair. you can anonymously use our service. we put this out of america. it gives safer terrain than most. >> zero sarcasm by the way. countersuing dory on a silva who doriana says she was hired to write fake profiles. had you see it ending? >> if you look at the court documents, what she submitted is the sitemake sure works when he wanted to a new country. she was also instructed to build male profiles and payments. we are running testing. you have to look at the person
>> get the latest headlines at the top of the hour streaming on your tablet or device. that does it for this edition of "bottom line." mark crumpton will be back in tomorrow. or shortly for all of you. "on the market" is up next. >> it is the six past the hour. i am olivia sterns. indexesmain benchmark are off session lows. the nasdaq falling the most common being dragged down by a selloff in the biotech sect or. a couple of individual movers for you. surging today.
they have been fined half $1 million for illegal sales and making claims it cannot verify. company may be able to get back on track in the country. china has been coming this for about two months now. shares are up about 17.5%. we're watching jpmorgan. company signed off over claims that it is a bernie madoff ponzi scheme. they have acknowledged this. aids to learned that 5 bernie madoff were found guilty on most counts of helping run the biggest ponzi scheme in u.s. history. exposed byon fraud the financial crisis. the verdict is still being read right now. going back to the broader markets, the small-cap index has rallied for the last seven straight borders. the longest run ever.
joining me now with a look at the small caps is mike from bloomberg. break it down for us. what is behind the huge rally. >> small companies obviously have a bigger market. if you look at the cap, they are saturated in the markets. companies, there is a lot more room to grow. at least in the last quarter, the s&p 500 once ran. is alarming right now. the russell 2000 price-to-earnings valuation is about 49 times trailing earnings. it is higher than it was during the.com bubble. it is a warming thing. that is deadly three times the ratio of the s&p 500. about 17 times earnings. it is about average.
>> is it fair to call this a bubble? >> a lot of people are concerned. you mentioned biotech stocks. there has been a wild card thrown at them. lawmakers last week questioning why some of these drugs cost so much. costingtitis c drug $45,000. that is another wildcard being thrown. we are taking a look at them. is a lot higher. if the market goes up 1% in the small-cap stocks tend to go up more. they tended to peak earlier on the markets. right now they're not too far off their records. it is a space to watch. >> interesting. mike from bloomberg news, thank you for joining us. set rightng and are now.
do you call the small-cap? >> it is about one billion on average. up 40% year to date. we're going to be on the markets again and 30 minutes. which wasmart" reagan is up next. ♪ >> stocks slipping today. the dow and s&p also lower. "street smart starts now. welcome to the most important hour of the session way 59 minutes until the close today. in an exclusive interview, the former secretary of the united states takes on our massive wage gap.